ASSIGNMENT ABOUT VINAMILK

FI R M VALUAT I O N

Instructor: Nguyen Thi Thu Trang Group 2 FI191C

 Group 2

Tran Hoan Thien Y

Huynh Thi Thuy Hang
Dang Thi Thu Ha
Vo Le Ngoc Han
To Thi Van Tu
Tang My Linh
INTRODUCTION ABOUT
VINAMILK
Introduction about Vinamilk

History of
establishment

On August 20, 1976, Vinamilk was

established on the basis of taking over
3 milk factories left by the old regime
Introduction about Vinamilk

Main business areas

Producing and trading in canned milk,
powdered milk, nutritional powder,
cakes, fresh milk, soy milk, beverage
and other dairy products.

Others (Trading in food technology,

equipment and spare parts, supplies;
House business; Producing and trading
in alcohol;....)
Vinamilk has maintained its leading role in the
domestic market and competed effectively with
foreign milk brands. One of Vinamilk's successes is
diversifying products to meet the needs of all
customers

With a variety of products,

Vinamilk currently has over 200
dairy products and dairy
products. Vinamilk's products are
not only trusted by Vietnamese
consumers but also in the foreign
market.
Evaluation of the
performance &
value of the
company
 Financial leverage ratios

Debt to total assets ratio

Vinamilk's debt-to-total assets ratio has

fluctuated slightly over the years but is
all below 1, showing that most of the
enterprise's assets are financed by
owners' capital.
Financial leverage ratios

Debt to Equity ratio

Most of the indexes are small, so the

company's capital from equity is
abundant, there is little external debt, it
is not under much financial pressure
and is doing business effectively.
 Financial leverage ratios

Interest Coverage ratio

Vinamilk's ability to pay interest on loans

was not affected too much when the index
increased or decreased insignificantly.
 Profitability ratios
Return on
assets(ROA)

ROA of two years 2015 and

2016 both increased, showing
that the company's asset use
efficiency is very good, but in
2017 and later, there is a sign of
decrease, which is a bad sign.
Profitability
ratios
Return on equity (ROE)
25.000.000
Liquidity ratios

Current liquidity ratio

20.000.000

15.000.000

In general, the indexes in each year are

10.000.000
greater than 1, showing that the business
is still operating very efficiently. But in
2017 and 2019 there are signs of decline,
5.000.000 so the operation is not as effective as the
remaining years.
0
Activity
coefficients
Inventory
turnover:

In 2016 and 2018, Vinamilk's sales were not good

compared to the remaining 3 years, but the
coefficients in each year were quite high and
fluctuated not much, so Vinamilk's sales were still
very good, with little inventory.
Activity coefficients
Fixed asset
turnover:

In 2017, the coefficient decreased sharply at

31% and 2018 decreased further, proving
that the company is investing in expanding
production scale and preparing for future
growth. In 2019, this ratio increased rapidly,
showing that the company's production scale
is shrinking, not interested in investing in
fixed assets.
Weighted Average Cost
Of Capital (WACC)

Using a risk-free rate (Rf) of 6.9% (nominal interest rate) on 10-year government
bonds issued on 3/3/2016
The growth rate and make
profit determinations of the
company

The historical value of Vinamilk from 2015 - 2019, the

average growth rate per year is 9%.
 Estimate the present value of the company

We will have the value of WACC=8.574% to

discount and calculate the present value of
cash flows from 2020-2025
 Terminal value=
Terminal value= 1.073.322.681

VALUE
PV=+
= 689.431.439

Value of firms= Terminal value+Total present value of FCFF in high growth phase
=1.073.322.681+64.175.358
= 1.137.498.039
P/E, P/B
ratios
Average number of shares in
EPS of the last 4 quarters Book value per share P/E P/B
circulation

2019 1,741,687,793 6.020 17,073.41 19.35 5.04

 ce
ri
P

By valuation method DCF and P/E, we give

a reasonable price for VNM stock at
around 122,000 VND/share.
122.000/per s h a r e
 GROWTH POTENTIAL OF THE DAIRY
Investment highlights MARKET IN VIETNAM

THE ENTERPRISE HAS A LARGE RAW

MATERIAL AREA AND CONTROLS THE
QUALITY OF FRESH MILK GOOD (LIKE
VNM) IMPROVES PROFITABILITY.

EXPECTED GROWTH OF BEEF BUSINESS

AFTER GTN WAX DEAL VLC IMPORT

WITH THE INCREASING DEMAND FOR

BEEF IN VIETNAM, BEEF FARMING
COULD BECOME A GROWTH ENGINE
FOR VINAMILK IN THE LONG TERM,
ESPECIALLY WHEN THE DAIRY MARKET
IS SATURATED.
Risk posible 01 Risk of fluctuations from
input material prices

Foreign markets (exporters

02 and branches in foreign
countries) are volatile

Increasing competition
03 among dairy enterprises in
the domestic market